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Tommy Cheung joins the call for HK$24 minimum

minimum_wage-increaseLast updated: April 21, 2010

Source: South China Morning Post

Clear the Air says:

this is from the Liberal Party – can you believe they are interested in the rights of the people , or their rich bosses whom they represent ? The Liberal Party delayed Hong Kong’s anti smoking legislation for 6 long years – how many Hong Kong people died because of that ?

Liberal Party warns of ripple effect of rise in wage level on businesses

Catering industry lawmaker Tommy Cheung Yu-yan – who got into hot water last month for suggesting a minimum wage of HK$20 an hour – has joined Liberal Party colleagues in proposing a rate of HK$24.

Cheung and party chairwoman Miriam Lau Kin-yee said that even at this level business would be severely affected by a “ripple effect” that would push up wages of workers already earning more than the minimum.

The suggestion was put to the Provisional Minimum Wage Commission yesterday along with one from the Hong Kong Confederation of Trade Unions suggesting HK$33.

The Liberal Party estimates that in addition to the 138,200 workers earning less than its suggested minimum, at least 400,000 earning up to HK$33 would also get a pay rise.

“A ripple effect is present anywhere when a minimum wage is introduced,” Lau said, citing the United States and Britain as examples.

“If the wage of a dish washer earning HK$20 per hour is increased to HK$24 per hour, a company also has to increase the wage of a pantry helper who earns HK$23 an hour as well as other workers who earn more than HK$24,” she said after meeting commission members.

“We believe the Provisional Minimum Wage Commission should also assess the impact of the minimum wage on enterprises.”

Liberal Party executive committee member Michael Tien Puk-sun said the wages of various workers would also have to be increased to offer incentives and to distinguish differences in job nature.

The party said its proposed minimum wage was consistent with international levels in terms of the number of workers benefiting and the ratio between the median wage and minimum.

Cheung said that as labour accounted for 30 per cent of costs in the catering industry, it would feel the greatest impact of all industries.

Citing a survey of 49 companies owning 1,867 restaurants with 75,000 workers, he said more than half the city’s restaurants were operating at a loss and pay increases would be a huge burden.

“Setting the rate at no more than HK$24 can forestall the loss of non-technical jobs and a spate of restaurant closures,” he said,

“At the end of the day, we do not want to see businesses shut down and low-skilled workers thrown into the street.”

Cheung dismissed talk that he had bowed to pressure in proposing HK$24 after the outcry that greeted suggestions the wage should be no more than HK$20. A man wearing a pig mask threw a HK$20 note at his feet after he said at a City Forum gathering than any amounts more than that would have a severe impact on Hong Kong’s employment, competitiveness and long-term investment.

After party and business allies distanced themselves from his idea, Cheung apologised on March 24. “I hope to let bygones be bygones,” he said yesterday, adding that the catering industry’s suggestion was made with serious consideration for business operations.

“Is HK$24 per hour enough or not? It is not our concern. What we look at is the influence on restaurants and how to protect the low-skilled workers from losing their jobs,” he said.

The Confederation of Trade Unions also met the Provisional Minimum Wage Commission yesterday and said the statutory minimum wage should be set at no less than HK$33 an hour.

The unions said the impact of such a rate was not as big as many people imagined.

“According to Census and Statistics Department figures, the total labour cost would only be increased by 1.6 per cent and the profit of all enterprises would only be decreased by 0.2 per cent when the minimum wage is set at HK$33 an hour,” the unions said in their proposal submitted to the commission.

“Even for enterprises depending largely on low-income workers, the total labour cost will only be increased by 8.4 per cent.

“We believe enterprises can still shoulder the increase.”

Secretary for Labour and Welfare Matthew Cheung Kin-chung said the Provisional Minimum Wage Commission was still collecting the views of various parties before announcing the minimum wage in July.

“The commission will consider a number of factors including the minimum wage’s impact on the labour market and business environment, Hong Kong’s competitiveness and living standards,” Cheung said.

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